BELAGAVI: Payment of higher price, cancellation of tenders for washing coal and purchasing power from private producers and also the failure to utilise power from the central grid has led to a loss of over Rs 4,300 crore to the state exchequer between 2003-04 and 2013-14, says a House committee report on power purchase which was tabled in the legislative assembly on Tuesday by Energy Minister D K Shivakumar.
The report, which had generated much speculation about putting some BJP and JD(S) leaders, including former Energy minister Shobha Karandlaje, in the dock, has however not indicted anybody. It has however recommended to the state government to identify the persons responsible for the losses and initiate stringent action against them.
The report has highlighted an alleged link between the BJP government headed by B S Yeddyurappa which allegedly paid an additional Rs 1,046 crore towards power purchase from JSW Energy Ltd and the case of this company buying land from a real-estate firm run by Yeddyurappa’s family members at a higher price. The finding is expected to trigger strong exchanges between BJP and Congress when the House takes it up for discussion on Wednesday.
The report also includes dissent note from JD(S) floor leader H D Kumaraswamy and panel members Basavaraj Bommai and Visveshwar Hegde Kageri of BJP.
According to the report, on May 22, 2010, it was decided to purchase 1,980 MW power and a letter of intent was issued to three firms — one in Odisha and two in Andhra Pradesh — to supply 150 megawatt, 450 megawatt and 200 megawatt at a cost of Rs 3,757, Rs 3,771 and Rs 3800 per kilowatt, respectively. The proposal was sent to the Finance Department, which gave its opinion saying that the tariff of the bidders is 11 per cent more when compared to the cost of power produced from Karnataka Power Corporation Ltd plants and the burden will be more on the state sovernment due to the state’s policy on power distribution.
Later, the then energy Minister Shobha Karandlaje, citing the higher cost of power, as advised by the Finance Department, recommended cancellation of the tenders.
Accordingly on May 5, 2011, the cabinet met and decided to cancel the tender and call for fresh tender. The tender was then awarded to JSW Energy Ltd for 25 years. Accordingly JSW supplied 12,038 million units of power. But the cancellation of tender and re-award of tender cost the exchequer an additional Rs 1,046.03 crore.
The committee report says a total of Rs 43,760 crore was spent on purchasing 99,051.28 million units during the period 20003-04 to 2013-14 from private producers. The average cost of power between the years 2005-06 to 2009-10 is Rs 8.55, Rs 11.50, Rs 12.39, Rs 8.66 and Rs 7.77 per unit, respectively. The average cost fixed by Karnataka Electricity Regulatory Commission (KERC) is Rs 6 per unit.
The report also points out to the power sector problem between 2004-2014, after the Union Ministry of Environment and Forests directed power generating firms to use washed coal and reduce pollution caused due to fly ash.
Accordingly, between 2002 and 2008, the government issued tenders to various companies to wash coal. The committee puts the loss due to contracts given to wash coal, at Rs 1,590 crore. The report also says that though there was a recommendation to mix imported coal with locally generated coal there was not much effort made to enhance import to over 9 per cent of coal requirement.
BJP’s dissent
The BJP members of the committee, Vishweshwara Hegde Kageri and Basavaraj Bommai have rejected the charges saying that non-utilisation of power from the central grid has been calculated based on sanctioned power by Centre to the state and not on the available power offered by the central grid to the state at that juncture. They said that between 2008 and 2014, the Centre never supplied the sanctioned power. The BJP has also rubbished the allegation of RTPS’ poor performance saying the unit had run into rough weather since 2000 and even in 2017. The BJP members said that the RTPS is designed to utilise low calarofic value coal and the charges of using imported coal is unfounded.